Lily McGuire was Terry Bogard's first love, she was introduced before Blue Mary). She was an orphan in the streets of South Town, but Geese Howard took her under his wing. She would work for him without hesitating, although she didn't like him. One day, Geese told her to sell flowers to a man named Jeff Bogard (to create a diversion, so his men could attack him). That was the day when Geese killed Jeff in front of his sons.
Years later, Geese Howard was hosting a King of Fighters tournament and Terry, Andy and Joe were entering. Terry entered a bar without knowing that it was being run by Geese; Lily was there, apparently drunk and teasing the men via telling them to catch a rose that belongs to her, so Terry remembered her and caught it. He flirted with her a little bit, but that started a fight between him and the other men. A while later, Terry finds her in the streets, talking to a group of street children that she had apparently befriended a while ago; they openly recognize each other, and then speak about their lives.

During the tournament, Geese ordered her to give Terry poisoned wine, but she couldn't do that to him; she then broke crying and explained the plan to Terry, who promised her he would save her from Geese's hands. During the semi-finals between Terry and Andy, the lights went out and a sniper attempted to kill Terry, but Joe saved him. Lily then, tried to show them the exit, but Geese appeared in front of her and killed her with a Reppuken blast, which not only injured her gravely but threw her off the nearby window. The unfortunate Lily perished in Terry's arms.

Terry swore revenge on Geese for killing his father, his love and later, his master. Lily, Jeff and Tung were essential in the movies since they provided inspiration for Terry to continue on his quests and not to give up.